FISCAL TRANSFER AND LOCAL DISPARITY - Asia...
Transcript of FISCAL TRANSFER AND LOCAL DISPARITY - Asia...
FISCAL TRANSFER AND LOCAL DISPARITYIN SOUTH SUMATRA PROVINCE INDONESIA
DIDIK SUSETYOProfessor of Economic Faculty, Sriwijaya University,
Palembang Indonesia, March 12, 2014
HANDOUT
IntroductionFiscal Decentralization (fiscal transfer)Local ‘Kabupaten/Kota’ DisparityTransfer reduce local disparityProspect & ChallengesRecommendation
INTRODUCTION
Definition and scope of fiscal decentralizationIssues on fiscal transfer or balanced fund Fiscal transfer can reduce inequality and disparity Prospect of fiscal transfer to decrease horizontal imbalance Best practices on fiscal transfer and decentralization
Why have to Decentralize? (Bahl 1999)
Economic DevelopmentElected GovernmentInefficient CentralizationUniformity Not AcceptableLocal Government CapacityAutonomy vs. Backdoor ApproachesPoor Service DeliveryPrevent Secession/Civil War
Why Decentralise? (Devas 2009)Administrative arguments– congestion at the centre– lack of local knowledge at centre– scope for experiment, innovation, mutual learningEconomic arguments– greater allocative efficiency if decisions reflect local conditions,
needs, priorities– connecting spending decisions to local tax, thereby internalising
costs and benefits Political arguments– democratic participation and local choice – greater access to decision‐makers– increased local accountability
But the dangers Threat to national unity and power of centreLack of capacity at local levelLack of resources at local levelRisk of increased inter‐regional inequalityRisks of inefficiency, loss of coordination and potential for increased corruptionRisks of capture by local elites:– local decision‐making processes not inclusive– neo‐patrimonialism and patronage relationships– inadequate mechanisms of participation & accountability
Issues on fiscal decentralizationAssigning to which level of governments in the provision of public goods that best internalized benefits and costs (expenditure assignment), and on the assigning revenue sources that mostly efficient among level of governments (revenue assignments).Transfer or balance fund increase annually Revenue and purchase of local government also increasingMajority of province tax (85%) is dominant revenue sharing comparing other sourcesMajor of local ‘kabupaten’ tax (40%) and retribution (33%) are dominant revenues sharing comparing other sources Major of local ‘kota’ tax (66%) is dominant revenue sharing comparing other sources
AD LOCAL ‘KABUPATEN’ COMPOSITION 2013
al ‘kabupaten’ tax (40%) is dominant source comparing to local ribution (33%) excluded asset management (8%) & other genuine
PAD LOCAL ‘KOTA’ COMPOSITION 2013
al ‘kota’ tax (66%) is dominant source comparing to local ibution (14%) excluded asset management (3%) & other genuine
POLITIK DESENTRALISASI DI INDONESIAKonsep desentralisasi mulai dikenal jaman pemerintah kolonial BelandaDecentralisatie Wet 1903, dijabarkan dalam BetuurshervormingWet 1922Ada pembagian daerah otonom: gewest, regenschaap, & staatgemeenteaman Jepang ketentuan di atas tetap berlakuSesudah merdeka, mengacu ke pasal 18 UUD 1945Lahir undang‐undang otonomi daerah:UU No.1 1945 tentang Komite Nasional Daerah dan ketenmtuan pokokPemerintahan Daerah berlaku sejak tgl 23 Nov 1945UU No. 22 1948, uu otda pada masa RISUUDS berlaku dan kembali ke bentuk negara kesatuan, UU No. 22 1948 tetapberlakuUU No. 1 1957 sebagai uu organik yang baruDekrit Presiden 5 Juli 1959 oleh Presiden Soekarno, lahir UU n0 6 1959 danPP No. 1 1963UU No. 18 1965 tentang Pemerintahan DaerahZaman Orde Baru lahir UU No 5 1974 tentang Pokok‐pokok Pemerintahan Di DaerahUU No. 22 1999 tentang Pemerintah Daerah
DESENTRALISASI FISKALDesentralisasi fiskal (DF) adalah pelimpahanwewenang di bidang keuangan dan fiskal kepadadaerah dalam memobilisasi dan memanfaatkansumber‐sumber pendapatan daerah.Dengan DF daerah mempunyai wewenang mengaturdan menggali potensi dan sumber2 keuangan sendiri.DFmerupakan komponen utama dari desentralisasi.Apabila Pemda melaksanakan fungsinya secara efektifdan mendapat kebebasan dalam pengambilankeputusan pengeluaran di sektor publik, makamereka harus mendapat dukungan sumber‐sumberkeuangan yang memadai baik yang berasal dari PAD BHP dan BP pinjaman subsidi/bantuan dari Pempus
FAKTOR PENDUKUNG PELAKSANAAN DF
Pemerintah pusat yang mampu melakukanpengawasan dan enforcementSDM yang kuat pada pemerintah daerah gunamenggantikan peran pemerintah pusatKeseimbangan dan kejelasan dalampembagian tanggungjawab dan kewenangandalam melakukan pungutan pajak danretribusi daerah.
sio Dana Perimbangan Thd Pendapatan Daerah (%)
2001 2003 2005 2007 2009 2011
Kab. Lahat
Kab. Musi Banyuasin
Kab. Musi Rawas
Kab. Muara Enim
Kab. Ogan KomeringIlir 0.00
20.00
40.00
60.00
80.00
100.00
120.00
140.00
160.00
2001 2003 2005 2007 2009 2011
Kab. Ogan KomeringUlu
Kota Palembang
Kota Pagar Alam
Kota Lubuk Linggau
Kota Prabumulih
Kab. Banyuasin
Kab. Ogan Ilir
Kab. OKU Timur
Kab. OKU Selatan
Kab. Empat Lawang
Rasio dana perimbanganterhadap pendapatan daerahkab/kota di Sumsel terlihatperkembangan trend yang berfluktuasi berkisar antara60% d 90%
Rasio Dana Perimbangan Thd PDRB (%)
00
00
00
00
00
00
2001 2003 2005 2007 2009 2011
Axis Title
Kab. Lahat
Kab. Musi Banyuasin
Kab. Musi Rawas
Kab. Muara Enim
Kab. Ogan KomeringIlir
0.00
10.00
20.00
30.00
40.00
50.00
60.00
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Axis Title
Kab. Ogan KomeringUlu
Kota Palembang
Kota Pagar Alam
Kota Lubuk Linggau
Kota Prabumulih
0.00
0.00
0.00
0.00
0.00
0.00
200120032005200720092011
Kab. Banyuasin
Kab. Ogan Ilir
Kab. OKU Timur
Kab. OKU Selatan
Kab. Empat Lawang
Rasio dana perimbanganterhadap PDRB kab/kota diSumsel untuk melihatbesarnya dana transfer yang dapat menstimuli ekonomid h k b /k
Elastisitas Dana Transfer Thd PDRB
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Kab. Lahat
Kab. Musi Banyuasin
Kab. Musi Rawas
Kab. Muara Enim
Kab. Ogan KomeringIlir
‐4.00
‐3.50
‐3.00
‐2.50
‐2.00
‐1.50
‐1.00
‐0.50
0.00
0.50
1.00
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Kab. Ogan KomeringUlu
Kota Palembang
Kota Pagar Alam
Kota Lubuk Linggau
Kota Prabumulih
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Kab. Banyuasin
Kab. Ogan Ilir
Kab. OKU Timur
Kab. OKU Selatan
Elastisitas alokasi dana transfer terhadap pertumbuhanekonomi kabupaten/kota diSumsel bersifat tidak elastisberarti ini justru menimbulkan
DISPARITY
Higher local economic growth can stimulate higher local disparityDifferent fiscal transfer can increase fiscal gap among local governments because they stimulate different implication on local revenue and local purchase of budget.Transfer of fund can reduce disparity among local government through priority allocation on education, health, and infrastructure.Fiscal transfer may reduce economic disparity among local but slow result empirically
Theories of Regional Disparities and Development
Three main theoretical approaches:–Neo‐marxist, theory of “underdevelopment”
–Neoclassical economics–Institutional political science
Neo‐Marxist TheoryClass‐based analysis of society and politicsOwnership and spatial concentration of wealth s importantStructure of development versus underdevelopment: regions are “kept” undeveloped or underdevelopednternational application, but also within a arge country such as CanadaMetropolitan‐Hinterland a variant of this
Neoclassical EconomicsThe market is (or should be) what determines development.Geographic and natural resource development help determine economic distribution of resourcesThe free market will adjust labor and capital to promote optimal allocation of resourcesEconomic integration and trade patterns important to considerMore recently: human capital formation seen as important factor
Institutional TheoryPolitics and the shape of institutions drive economic outcomesPolicy factors shape the economy over timeMarkets (and their rules) are themselves institutions.In a regionally diverse economy, some regions win, some lose, according to their political influence and input to institutions
ransfers to reduce regional fiscal disparities (Shah, 2004)
Design: General non‐matching fiscal capacity equalization transfers.
Better practices: Fiscal equalization programs (sources of data: CGC, Finance Canada, Lotz, Shah & Spahn)
Paternal: Australia (fiscal capacity plus fiscal needs) and Canada (fiscal capacity only)
Solidarity, Fraternal or Robin Hood: Germany (fiscal capacity), Sweden, Denmark
Practices to avoid: General revenue sharing with multiple factors e g practices in Brazil India and South Africa
Gini Ratio, 1996‐2013
0.30
0.26
0.290.31 0.32
0.30 0.31
0.34 0.34
0.400.38
0.36
0.310.33
0.36 0.360.35
0.37 0.38
0.41 0.41 0.41
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05
10
15
20
25
30
35
40
45
1996 1999 2002 2005 2007 2008 2009 2010 2011 2012 2013
Sumatera Selatan Indonesia
paring Gini ration between South Sumatra and Indonesia tend to higher
deks Williamson dan Indeks Theil untuk Total Dana gi Hasil Kab/Kota di Sumatera Selatan, 2001‐2008 (%)
0123456789
2001 2002 2003 2004 2005 2006 2007 2008
Indeks Williamson Indeks Theil
disparitas keuangan daerah mempunyai trend naik berarti semakinar; (2) pembagian dana bagi hasil belum berfungsi menutupij j t i b lk di it ki b (3) i d k
fisien korelasi antarvariabel keuangan daerah kab/kota Sumsel Correlations
1 .812* -.484 -.712* -.859** -.776* .779*.014 .224 .048 .006 .024 .023
.097 .059 -.028 -.086 -.284 -.110 .035
.014 .008 -.004 -.012 -.041 -.016 .0058 8 8 8 8 8 8
.812* 1 .034 -.318 -.551 -.492 .385
.014 .936 .443 .157 .215 .346
.059 .055 .001 -.029 -.137 -.052 .013
.008 .008 .000 -.004 -.020 -.007 .0028 8 8 8 8 8 8
-.484 .034 1 .886** .682 .810* -.845**.224 .936 .003 .062 .015 .008
-.028 .001 .036 .065 .137 .070 -.023
-.004 .000 .005 .009 .020 .010 -.0038 8 8 8 8 8 8
-.712* -.318 .886** 1 .884** .950** -.890**.048 .443 .003 .004 .000 .003
-.086 -.029 .065 .151 .364 .168 -.050
-.012 -.004 .009 .022 .052 .024 -.0078 8 8 8 8 8 8
-.859** -.551 .682 .884** 1 .898** -.889**.006 .157 .062 .004 .002 .003
-.284 -.137 .137 .364 1.124 .433 -.137
-.041 -.020 .020 .052 .161 .062 -.0208 8 8 8 8 8 8
-.776* -.492 .810* .950** .898** 1 -.884**.024 .215 .015 .000 .002 .004
-.110 -.052 .070 .168 .433 .207 -.058
-.016 -.007 .010 .024 .062 .030 -.0088 8 8 8 8 8 8
.779* .385 -.845** -.890** -.889** -.884** 1
.023 .346 .008 .003 .003 .004
Pearson CorrelationSig. (2-tailed)Sum of Squares andCross-productsCovarianceNPearson CorrelationSig. (2-tailed)Sum of Squares andCross-productsCovarianceNPearson CorrelationSig. (2-tailed)Sum of Squares andCross-productsCovarianceNPearson CorrelationSig. (2-tailed)Sum of Squares andCross-productsCovarianceNPearson CorrelationSig. (2-tailed)Sum of Squares andCross-productsCovarianceNPearson CorrelationSig. (2-tailed)Sum of Squares andCross-productsCovarianceNPearson CorrelationSig. (2-tailed)Sum of Squares and
InWilDau InTheDau InWilDbh InTheDbh PadDP PadPdrb DSF
Implikasi Koefisien KorelasiKoefisien korelasi antara rasio PAD/Dana Perimbangan dengan indeks Williamson DAU sangat siqnifikan yaitu sebesar –0,859. Hal ini berartisemakin kecil rasio PAD/Dana Perimbangan, makadisparitas keuangan berdasarkan DAU semakin besar. Korelasi antara PAD/PDRB dengan indeks Williamson DAU sebesar ‐0,776, ini berarti semakin tinggi rasioPAD/PDRB, maka indeks Williamson semakin rendah. Korelasi antara indeks Williamson dengan derajatsentralisasi fiskal sebesar ‐0,779, ini berarti semakintinggi derajat sentralisasi fiskal semakin tinggi
Best Practice: Fiscal Federalism(Brown, 2009)
Fiscal Federalism (FF) = The system of revenue sharing, expenditure sharing, and direct intergovernmental transfers in any multi‐level government political community Fiscal Equalization (FE) = A Federal government program to top‐up the revenues of provinces with below‐average fiscal capacityEqualization provides unconditional grants to the recipient provinces‐‐allows provinces the autonomy to spend as they like…to alleviate disparities in basic serviceCanada Health Transfer (CHT)…it and other federal transfer programs (intergovernmental grants) are more or less conditional i e funds are for a specified
PROSPECT
Fiscal transfer can stimulate local economic growthTransfer of fund have to manage efficient and effective to overcome local disparitiesThe local budget focus on priority program to decrease the inequality Fiscal transfer improve local revenue to finance many programs and projects to increase local growth and to reduce disparity
Fungsi APBN (DJPK 2013)
Fungsi alokasi: Fungsi alokasi pada dasarnya adalah menggunakan berbagai sumber pendapatan untuk menyediakan pelayanan publik. Fungsi distribusi: Pendapatan negara dari pajak dan bukan pajak tidak semua digunakan secara langsung untuk menyediakan pelayanan publik. Tetapi dapat juga didistribusikan dalam bentuk dana subsidi dan dana pensiun. Fungsi stabilisasi: APBN sebagai ujud kebijakan fiskal bersama‐sama kebijakan moneter berfungsi untuk menjaga stabilitas harga, stabilitas nilai tukar, dll.
Fungsi APBDungsi Otorisasi: dasar untuk melaksanakan pendapatan danelanja pada tahun yang bersangkutan.Fungsi Perencanaa: pedoman bagi manajemen dalammerencanakan kegiatan pada tahun yang bersangkutan.Fungsi Pengawasan: pedoman untuk menilai apakahegiatan penyelenggaraan pemerintah daerah sesuaietentuan yang ada.ungsi Alokasi:mengurangi pengangguran dan pemborosanumber daya, serta meningkatkan efisiensi dan efektivitaserekonomian.ungsi Distribusi; memperhatikan rasa keadilan danepatutan
F i St bili i
rimaan Pemerintah:
nerimaan Dalam Negerienerimaan dr Pajakenerimaan bukan Pajakah
nja Pemerintah:
elanja Pemerintah Pusatelanja Daerah:ropinsi
Kabupaten/Kota
biayaan:
lam Negeriar Negeri:
/
APBN APBD Propinsi
APBD Kabupaten/Kota
1. Penerimaan Propinsi:a. Pendapatan Asli Daerah:
- Pajak- Bukan Pajak
b. Transfer dari Pemerintah Pusat2. Belanja Pemerintah Propinsi:
a. Belanja Pem. Propinsib. Belanja Kabupaten/Kota
3. Pembiayaan:- Pinjaman
1. Penerimaan Kabupaten/Kota:a. Pendapatan Asli Daerah:
- Pajak- Bukan Pajak
b. Transfer dari- Pem. Pusat
Pem Propinsi
Hubungan APBN–APBD(DJPK2013)
CHALENGESMany constraint and implication to reduce disparity by using pattern of fiscal transfer Weaknesses of local government management is the main constraint Ego sector and hard coordination influence on many local development program and activitiesLack of fund and local distress are beyond in order to eliminate local disparities Indirect local purchases (operational expenditure)is bigger than direct purchases (capital expenditure)
ntergovernmental Fiscal Transfer Reduction ofRegional Fiscal Disparities (Fleiner, 2003)
ree objectives:
Bridging vertical fiscal gapsBridging fiscal divide between nationsSecuring a common economic union through establishing national minimum standards in social and infrastructure services
PLICATION:Clarity and consensus for responsibilitiesFinance should follow function to strengthen responsibilitiesTo ensure fiscal discipline all governments must be made to face the fiscal consequences of their decisionsSecuring a common economic union through unimpeded goods and factor mobility and national minimum standards for social services and infrastructure is the best guarantee for political and economic stability & regional convergence.Properly designed intergovernmental transfers can strengthen results based accountability and also enhance competition for the supply of public goods, fiscal harmonization, state and local government accountability, and regional equity. Institutional arrangements for managing intergovernmental
Intergovernmental Transfer (Bahl 2012)
• Intergovernmental transfers– Grants– Subsidies– Shared taxes
• Local taxes• Piggyback local taxes
ypes of Intergovernmental Transfers
Unconditional or general Conditional or specific (for capital and/or operating expenditures) –Non‐matching–Matching
• Open‐ended• Close‐ended
Direct cost reimbursement
Close the “fiscal gap” (More Transfers, More Local Raised Revenue, Local Expenditure Efficiency, Re‐Assign Expenditure/Responsibility)Equalize fiscal capacity and need (The objective of an equalization transfer should be to protect (or guarantee?) some basic level of services)Adjust for spillovers (Fiscal Capacity, Expenditure Needs, Capacity‐Needs Gap)Increase effectiveness of central expendituresPolitical reasons
ustifications for Intergovernmental Transfers
he Transfer System has a Strong Effect on Fiscal Disparities among Sub‐National Governments (Schick 2011)
ecentralizing public finances risks enlarging inequality among Sub‐ational Governments(SNGs) because rich local governments can enerate more tax revenue than poor governmentshe transfer system (return of tax revenue and grants) can either iden or narrow these disparitiesax rebates (or sharing) returns more to affluent communities with rong tax bases, and therefore has counter‐equalizing effects: a ormula based system (for example, with the amount transferred verse to per capita income) has the potential to narrow fiscal fferences among SNGs.rants also have the potential to expand or reduce inequality. Grants hat match local expenditures tend to be de‐equalizing, those that ompensate SNGs for low income have the opposite effectis important for Central Government (CG) to periodically review the
egative Lessons: Practices to Avoid (Shah 2004)
General revenue sharing with multiple factorsDeficit grantsFiscal Effort ProvisionsInput or process based or ad hoc grantsCapital grants without assurance for upkeepNegotiated or discretionary transfers
Positive Lessons: Practices to Strive For (Shah 2004)
K.I.S. (keep it simple)Focus on single objectiveIntroduce sunset clauseOutput based conditional transfers with citizens’ evaluationsFiscal capacity equalization to a defined standardPolitical consensus on the standard of equalizationInstitutional arrangements for broad based
RECOMMENDATIONFiscal transfer system on local goverment is important to help and make widespread local finacing but does’nt make impact on narrowing fiscal gap among ’kab/kota’ in South Sumatra The higher fiscal dependency degree, the local government couldn’t make improve the capacity themself on local revenue.Fiscal transfer may reduce the local disparity but the realisation is very slow empirically.Implication of fiscal transfer maybe can reduce disparity but also stimulate a higher disparities.
REFFERENCES…Bahl, Roy, 2014. ‘Intergovernmental Transfers’, Georgia State University ([email protected])Brown, Douglas. 2009. ‘Regional Disparity and Development’, Canada Case.Devas, Nick. 2009. ‘Finance for Sub‐National and Local Governments’, International Development Department School of Government & Society, University of Birmingham, October.DJPK, 2013. Desentralisasi Fiskal, Hubungan Pusat‐Daerah. Fleiner, Thomas. 2003. ‘Fiscal Decentralization,’ …Allen Schick, 2011. ‘Fiscal Decentralization: Governing for Results’, Special Course on Impact Evaluation and Results‐Based Planning and Budgeting, Shanghai,14‐18 November.Kemenkeu 2014 Potret APBD Tahun 2013 Dirjen Anggaran
REFFERENCESRohima, Siti, 2009. ‘Ketimpangan Fiskal Kabupaten dan Kota di Sumatera elatan’, Tesis, PPs.Universitas Sriwijaya (Tidak dipublikasikan).Rosen, Harvey S. 1999. Public Finance (Ch. 21: “Public Finance in Federal ystem”), 5th ed., Singapore: Irwin/McGraw‐Hill.hah, Anwar , 2004. ‘Lessons from International Practices of ntergovernmental Fiscal Transfers,’ World Bank XVI Regional Seminar on Fiscal Policy, CEPAL/ECLAC, Santiago de Chile January 26‐29.usetyo, Didik, 2008. ‘Fiscal Gap and Regional Growth of Kabupaten/Kota’ in South Sumatra’, Jurnal Kajian Ekonomi, Jurnal Penelitian Bidang Ekonomi, Vol. No.2, Dec.2008, PSIE‐PPs. Unsri usetyo, Didik, 2009, Ketergantungan Fiskal Kabupaten dan Kota diumatera Selatan, Makalah Seminar Akademik Kenaikan Jabatan keGuru Besar, Universitas Sriwjaya, 22 Juli 2009.usetyo, Didik, 2009. ‘Disparitas Keuangan Daerah di Sumatra Selatan,’